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Government to introduce new corporate disclosure rules



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thk news**$£28® ^ RELEASEATTORNEY-GENERAL----------------------------------------------------------------------------THE HON. MICHAEL DUFFY M P -------------------------------------------------------------------------------------------------------23/922 July 1992 GOVERNMENT TO INTRODUCE NEW CORPORATE DISCLOSURE RULES

Attorney-General Michael Duffy, today announced Government approval for the introduction of legislation to implement a new system for corporate financial disclosure.

The legislation, which I expect to introduce in the Parliament later in the year, implements a scheme broadly along the lines recommended by the Companies and Securities Advisory

Committee report of September 1991. The Ministerial Council for Corporations has agreed to my proposal that, following the introduction of the Bill in Parliament, debate on the Bill be deferred for 3 months to enable public comment on its detailed provisions”.

“The level of financial disclosure by major corporate entities in the 80s was grossly inadequate,” Mr Duffy said.

“Many of the corporate regulation problems experienced during that period could well have been avoided had there been an effective disclosure system in place. This legislation will

ensure that investors can make informed decisions about the allocation of their funds.”

Disclosing entities will be required to report on an ongoing basis to the Australian Securities

Commission all material matters which have a significant effect on their financial position. Lodgement of half yearly accounts will also be required.

“While the Government endorses the basic principles recommended by the Advisory

Committee, it is concerned that legislation should not impose unnecessary regulatory costs on

affected entities. Certain modifications are envisaged to the scheme proposed by the

Committee in light of extensive consultations undertaken with business and professional organisations.

The new disclosure rules will apply to listed companies, other corporate entities whose

securities are traded or offered for sale and regulated prescribed interest schemes.”

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“The legislation will ensure therefore that adequate disclosure is required in all cases where there are arms length investors who have a direct use for ongoing financial information for

the purpose of monitoring the performance of their actual or potential investment.”

“In addition to narrowing the scope of entities subject to the disclosure regime, the proposed

continuous obligations will be framed to make it clear that they do not impose the due

diligence obligations which apply to the issue of a one-off prospectus for raising funds.”

“With the introduction of a statutory scheme for ongoing disclosure there is clearly scope for streamlining existing prospectus requirements. I envisage further consultation with business and professional groups in developing amendments to prospectus provisions to be included in the Bill.”

“The new disclosure rules will be a major step in the Government’s comprehensive program in corporate law reform. The proposed legislation reflects the Government’s commitment to ensure that investors are given effective protection from corporate abuse, without imposing

unreasonable compliance costs,” Mr Duffy said.

Perth

Contact: John Ellis (06) 277 7300